J.G. Wentworth, a financial services company, has decided to file for bankruptcy. The Chapter 11 bankruptcy filing took place on a recent Tuesday. If companies in Massachusetts have debt obligations that they cannot sustain, which is J.G. Wentworth’s situation, they may benefit from seeking bankruptcy protection. Â
J.G. Wentworth’s recent bankruptcy filing is the company’s second one in under nine years. The company purchases life insurance policies in addition to offering mortgages. The company said it had prepackaged a plan for reorganization that had already received a sufficient number of lender votes and votes from others.
In this type of prepackaged bankruptcy, a company can negotiate with major creditors and acquire votes for the plan before filing for bankruptcy. This helps to shorten the bankruptcy filing process. As part of the bankruptcy, J.G. Wentworth will receive revolving credit that will enable it to stay in operation without interruption. A major reason the company has struggled in recent years is rising competition in the home lending industry as well as in the industry of structured settlement payment purchasing.
Companies in Massachusetts sometimes face industry and economic challenges that cause their liabilities to outweigh their assets. Fortunately, Chapter 11 bankruptcy may help them to reorganize their debts and thus increase their chances of surviving financially in the years ahead. However, bankruptcy can be overwhelming due to the many complex steps involved. An attorney can help with navigating the complex filing process to make sure that all steps are completed in a proper and timely manner from start to finish.
Source:Â wsj.com, “J.G. Wentworth Files for Chapter 11 Bankruptcy Protection,” Becky Yerak, Dec. 12, 2017